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AARP Florida calls to overturn FPL approval for natural gas speculation in Oklahoma

in Statewide/Top Headlines by

AARP is asking the state Supreme Court to stop Florida Power & Light Inc. from investing in speculative natural gas production in Oklahoma, and to direct the state Public Service Commission to reconsider its approval for the plan.

“For the first time, Florida utility regulators have required our state’s consumers to pay millions, in advance, for an electric utility company to join in a natural-gas exploration project in Oklahoma that may never return the anticipated benefit to Florida utility ratepayers,” said Jeff Johnson, state director of AARP Florida.

“We’re asking the state’s highest court to call a halt to this flawed decision. The Florida Public Service Commission (PSC) should focus on fair, just and reasonable utility rates, not on allowing electric utility companies to shift the risk of speculative business ventures from themselves to consumers.”

In a friend-of-the-court brief filed Thursday afternoon, AARP argued that the PSC  should set rates allowing utility companies like FPL to recover their costs only for assets that are actually being used to produce power.

In the Oklahoma fracking case, the PSC has given FPL the power to make its customers finance its energy speculation, rather than its investors, and whether the natural-gas project — which many believe includes hydraulic fracking — succeeds or fails in producing gas reserves, FPL still can earn a return on the overall investment.

“The role of utilities regulators is to make sure that the utility is as careful with the ratepayers’ money as it is when its own wallet is on the line,” AARP argued.

AARP also rejected FPL’s argument that the Oklahoma project would help protect consumers’ interests by providing access to lower-cost natural gas reserves decades in the future.

“It is impossible to know what the cost of the natural gas will be until it is actually being produced. In fact, it is entirely speculative whether the investment will ever produce fuel that can be used to generate electricity for FPL’s ratepayers,” AARP argued.

AARP also raised the possibility that if the PSC ruling is allowed to stand, it may create a precedent for other utilities companies.

In its brief, AARP argued that “unsurprisingly, other Florida utilities welcome the prospect that they too will be able to take advantage of advance cost recovery that will shift risk onto the ratepayers.”

AARP also noted that Oklahoma-based companies have abandoned similar ventures, even as FPL is pressing ahead.

Johnson said AARP seeks to overturn the PSC’s ruling not on environmental grounds regarding fracking, but because the decision shifts risks from investors to consumers with no certain benefit to consumers.

The Florida Public Counsel, the state’s official utilities consumer advocate, is challenging the PSC’s January 2015 ruling approving FPL’s $190-million “Woodford Project,” a joint venture to drill for and develop natural-gas reserves through hydraulic fracturing in Oklahoma.

In an email, Mark Bubriski, FPL director of public affairs, said he was “disappointed” that Johnson is “trying to mislead the public” for political purposes:

This important investment isn’t about paying “in advance,” and it’s not increasing rates. In fact, this investment is designed to save our customers money by obtaining a portion of the fuel for our plants at a low stable cost – instead of paying middlemen at volatile market prices.

Over the project’s 30-year lifetime, it is projected to pay for itself and generate an additional $50-$100 million in net savings for FPL customers.

And, despite Jeff Johnson’s incorrect insinuation, the project is already benefitting customers. Our power plants began receiving affordable clean fuel from the investment in March of this year.

Proactive initiatives like this have been instrumental in helping us reduce customer rates, maintain reliability and provide clean energy for our customers. Since 2001, our investments in natural gas energy have saved customers more than $7.5 billion in fuel costs. Today, our typical customer bill is about 30 percent lower than the national average while our system is among the cleanest in the U.S.

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